The New Zealand Taxpayers’ Union submitted feedback on Inland Revenue’s draft Long-Term Insights Briefing on the future of New Zealand’s tax system. While the briefing aims to explore long-term revenue options, we argued it is incomplete and fails to properly consider alternative approaches to tax policy.
In our submission, we criticised the reliance on outdated frameworks that exclude options like a flat tax, and instead proposed four core principles: simplicity, transparency, neutrality, and stability. We also called for a simpler tax base and highlighted a major gap, the absence of any analysis of tax elasticity, including the Laffer Curve, which is critical to understanding how tax rates actually affect revenue.
This matters because flawed assumptions about tax revenue risk leading to poor policy decisions. Ignoring how taxes impact behaviour can reduce investment, slow growth, and even shrink government revenue. Without a more complete and economically grounded analysis, the briefing risks steering New Zealand toward weaker growth and long-term fiscal challenges.
